President Barack Obama on Thursday launched a $2.4 billion program to boost development of plug-in electric vehicles in the U.S., including grants to finance domestic production of auto batteries.

Obama spoke at Southern California Edison's Electric Vehicle Technical Center in Pomona, Calif., where he said the Department of Energy has now started taking grant proposals from electric-vehicle battery makers.

The stimulus plan passed earlier this year set aside $2 billion to jump-start electric-vehicle manufacturing. Out of that total, $1.5 billion is available for U.S. battery manufacturing and $500 million for related technology, such as electric motors.

The Department of Energy is making another $400 million available to build and test the infrastructure needed for plug-in electric vehicles. This includes charging stations and training for technicians in electric vehicles.

The funding will help meet the president's goal of 1 million plug-in vehicles by 2015 and position U.S. companies for the next wave of transportation technology, Obama said.

"Even as our American automakers are undergoing a painful recalibration, they are retooling and reimagining themselves into an industry that can compete and win, because millions of jobs depend on it," Obama said at the event.

Echoing comments he made during his address to Congress last month, Obama said the U.S. lags other countries in plug-in battery technology, which the grant program is designed to address.

Because the company considers it strategic technology, General Motors earlier this year decided to build the battery packs and power controls for its forthcoming Chevy Volt electric sedan in-house. Battery companies A123 Systems and Ener1 have already applied for DOE loans and are expected to seek participation in the $2 billion battery manufacturing grant program.

"Show us that your idea or your company is best-suited to meet America's challenges, and we will give you a chance to prove it," Obama said, addressing electric-vehicle companies. "Every company that wants a shot at these tax dollars has to prove their worth."

To spur demand for electric vehicles, the stimulus act gives consumers a federal tax credit worth up $7,500 for the purchase of plug-in electric vehicles.

But executives at U.S. auto companies have voiced concern over the ability of the industry to supply enough batteries for an oncoming wave of plug-in electric sedans. Creating the capacity for hundreds of thousands of plug-in passenger cars in two or three years requires big investments today, Charles Gassenheimer, the CEO of Ener1 said on Tuesday.

"Demand is not the issue. It's the ability to supply," he said. "You still need to make the investments in the platforms today. Otherwise, you miss the window of opportunity."

About the author

Martin LaMonica is a senior writer covering green tech and cutting-edge technologies. He joined CNET in 2002 to cover enterprise IT and Web development and was previously executive editor of IT publication InfoWorld.
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